Dispute resolved: Lessors suspend court proceedings against SpiceJet

Budget carrier SpiceJet today issued a clarification saying that the five leasing companies, which have filed a winding-up petition against the airline at the Madras High Court, have now decided to suspend court proceedings. Both the airline and the lessors have begun talks to settle the issue outside court. “SpiceJet has entered into an in-principle understanding with its five lessors managed by BBAM Aircraft Leasing and Finance with regard to five (5) aircraft operated by the Company. Under the said understanding, the lessors have agreed to suspend court proceedings (including winding-up proceedings) and deregistration process of aircraft subject to SpiceJet satisfying the terms of settlement and parties executing definitive agreements, the airline said in a statement. [caption id=“attachment_2164387” align=“alignleft” width=“380”] AFP[/caption] The lessors had filed a winding-up petition stating that the airline owes them Rs 80 crore. On 19 March, the Delhi high court ordered the DGCA to deregister six SpiceJet planes so lessors could take them back. But SpiceJet sought an urgent hearing of the matter saying once its planes are de-registered by Directorate General of Civil Aviation (DGCA), it won’t be able to fly them which in turn would affect the people who have booked tickets months in advance. The Irish firms had moved the court seeking directions to DGCA to deregister the aircraft given on lease to the airline as the aviation regulator had not carried out the exercise despite several representations by the firms. The firms had said that they had sought de-registration of the aircraft as their lease with SpiceJet had been terminated due to alleged default in payment of lease rents by the airline. The court had directed DGCA to “forthwith” de-register the aircraft saying once the creditors fulfilled the conditions prescribed in Aircraft Rules, the aviation regulator was “mandatorily required to cancel registration”. The court had said the petitioner companies, AWAS Ireland Ltd and Wilmington Trust SP Services (Dublin) Ltd, had fulfilled the conditions stipulated in the Rules, and therefore, DGCA had no discretion in the matter. It had also directed DGCA to decide within two weeks the companies’ plea for export of the aircraft out of the country and disposed of the pleas of the Irish firms. Apart from settling its dispute with the lessors, SpiceJet is also taking seven additional planes on lease to meet its flight plans for the summer schedule that started on 29 March. It also expects another Rs 500 crore infusion by its new owner Ajay Singh in April. Singh has already pumped in Rs 500 crore into the carrier after he took over control in February from erstwhile promoter the Maran family as part of the airline’s revival plan. According to the revival plan, submitted to the civil aviation ministry in January for its approval, the new promoter had to invest Rs 1,500 crore in three tranches of Rs 500 crore each between February and April.